How much should I be saving?

[mytartanscarf]

I earn approximately £600 p/w (it's approximate due to two zero hour contract jobs)

How much should I be saving monthly?

I'm not too fussed about the pension just at the moment - I don't, quite honestly, ever expect to be in a position where I get to claim it.

I do have a teachers pension but don't want to make additional payments at the moment.

I paid into my teachers pension for 10 years but am having two years 'gap year'

I'm also unused to saving and budgeting. But we're currently having to save like mad to pay the final bits of our wedding in June, so I had to find a way to do it ASAP.

What I did was work out ALL my expenses (insurances, mortgage, tax, etc; the MoneyAdviceService has quite a good budget page where you can type all this in, it's good for reminding you of common expenses you'd otherwise overlook, like haircuts, etc) and my income.

I knew how much we had to save every month to hit our wedding costs (£370/month). So I set up a standing order for that.

Then anything left over pays for food, going out, clothes, etc. In my case, I have £140 a week. I then use the CashStrapped app on my phone to chart EVERY penny of that £140. It's brilliant to have it on my phone where I can put it in straight away.

This week is a bad week - I have to go to the dentist (£50) and the hairdresser (£60). So I know I only have £30 for food! Yikes!

The CashStrapped app is so simple, just a place where you set a weekly budget then either add to it (when you get unexpected cash) or take it away (when you spend). There are probably much better apps, but I get lost when it's too complicated. :)

saving is a funny term really, it can be so fluid.

You will have your basics that don't really change much so write those down eg housing costs (fuel, water, mooring fee? laundry). Your typical food shop and so on.

Think about how much you spend over a year on clothes and shoes and again divide into a monthly figure.

and of course you need fripperies money for books, make up, magazines, takeaway, a night out etc.

You need contents insurance at the very least and should have some form of insurance on your boat. You should also look at low insurance just to cover funeral costs even though you have no dependents. Plus i assume you have car insurance, mot etc. many of these may be an annual cost and it tends to be cheaper to have it annual but still split it into monthly and put the amount away into a savings pot each month so you can pay as a lump sum and never get a nasty surprise.

It is also a good idea to put an amount towards the typical cost of your car service away each month plus some extra top build up a car replacement fund.

stuff like the car fund is then there and can, if the shit hits the fan, be used to live off.

We find a general savings pot makes us twitchy about spending so we split it and have amounts each month going into different pots for home repairs, holidays and so on plus a general savings pot. It means we can do work to the house when it needs it without seeing our main rainy day fund diminish but when you add the pots together we have a decent amount should we find ourselves in a tight spot.

For a month write down absolutely everything you by. Keep receipts, jot everything down at the end of every day.

This will tell you where exactly you are frittering away money that you could save.

It sounds as if you are on the mature side of life - will you be able to live on your boat when you are elderly? What is you plan fr that? can you live in one of your rental properties, or sell and buy something more suitable?

You need to save :
Enough for a rainy day. Say 3 months bare expenditure in case you get no income for 3months in a row
For an expensive boat repair

Look at your annual outgoings / overheads and your monthly incidental expenditure and then judge how much you can afford to save. Save this amount every month - and in lean months tally the saving shortfall and make it up in more lucrative months.

It's all in the spread sheets.

Spread sheets..?

dh organises all our pots via spreadsheet. He can then compare the totals with what is in the account and make sure we are on track. He has the spreadsheet linked to a graph and everything. i leave it all to him . The graphs that is, the budgeting we talk about.

Mature? I'm 32!

I'm not sure how to use spreadsheets - not really au fait

Sorry! Am laughing at mature side of life!!

You don't have to use spreadsheets. A piece of paper, calculator and pencil will do. Just add up what your getting and what you're spending. Easy really. You don't appear to have that many outgoings (bills etc).

Oh, sorry - It was the 10 years in teaching and other things that made me think that.

No need to contemplate your eligibility for sheltered housing yet, then

Spread sheets - money in, money out - in Excel or on the back of an envelope!

My only savings is my pension. I find it really difficult to save, and if you are like this too, paying into a pension is a good way of saving 'cos you can't access it until retirement age!

Well, I want to use it before then! Besides, I'm not very likely to reach retirement age so I'm not hugely concerned about that just now.

Has a doctor actually told you that you'll not reach your 60s? If not, I honestly think you should assume that you will and start planning accordingly. You can access pensions at 55 - it's not THAT long away! And how else will you survive, if you have no money and no way of earning money? If you're not paying National Insurance, you won't even qualify for a state pension.

With the miracle that is compound interest, small savings grow HUGE over a long time. Even just £100/150 a month (which you could easily afford) for 30 years will leave you with a pot of... Hold on, let's work it out...

Yes, £150 a month, for 30 years, at just 4% interest, will leave you with a pot of over £100,000. At 6% you'd get over £150k.

Look here: www.thisismoney.co.uk/money/saving/article-1633419/Monthly-lump-sum-savings-calculator.html

But time is the magic ingredient! You can do this now, but not if you start in your 40s and 50s.

Although good luck getting 4% interest!

Don't save nothing!!!!!!!!!!!!!!!!!!!!!!!!!!!

Sped the lot! and take out as much credit as you can.

think of it this way if you save £1 today for 10 years with the interest rates as they are you will get back £1.20.

now if you buy a loaf of bread that will cot you £1 today. but in ten years time it will probably cost you £2.

so your savings are worth less in the future than they are today so why save????? Doesn't make sense to me

I didn"t read Hoppity's post as snippy. Just a statement of a minimum that should be acheivable.

Why save?

Because you will still need to buy some food and have a roof over your head when you are old. Yes, your money may be worth less so you might not be able to afford as much but you still need it. And actually long term savings wise stocks and shares tend to do well, apart from times of recession the markets tends to increase not decrease.

You save because when your washing machine breaks it makes sense to be able to buy another one without having to use credit. Or you might write off your car and while it is insured you only get the value at the time of the crash which is considerably less than it costs to actually buy a similar car.

It makes sense to save because one day you might want or need a bigger house. Or your work might mean you have to move to a more expensive area.

You save because should you become ill and be unable to work then you need the savings to continue to pay your living costs.

There are many reasons.

Thank you but I have my teachers pension and given my family history I am not likely to reach my 70s (retirement age is 68) - I am really not interested in making further contributions I won't see.

I repeat I have my teachers pension which will, by the time I turn 60, have over 35 years of contributions into it so I'm not worried about not contributing for two years :)

This is about savings I want for travel and other things. :)

Although good luck getting 4% interest!

My pension investment has averaged 8% pa over the last 3 years so it can be done.

Yes a sound pension investment in stocks and shares can grow very well, starting savings for travel etc in cash ISAs etc isn't going to get 4% at the moment!

As I have painfully and repeatedly explained I will not get to draw out a pension I will hide the thread. Thank you.

Thanks hillgirl. I felt pretty awful afterwards.

Don't. I misread your tone and I did apologise in advance if I had :)

I hope you will accept my apology

I can't work out how to hide the thread!

Thanks mytartanscarf.

I only know how to hide on the mobile site, there's a wee arrow at the top with some drop down options.